If you exclude those in this country who speculate on property for a living (and some of their hangers-on), the budget measures on property should generally be better for most of us, so read into all the alarmist talk and claims carefully before you decide.

The new taxation system is better, and if as the Prime Minister indicated in an interview with the Sunday press yesterday some aspects of the 12 per cent withholding tax may be fine-tuned, they should also be fairer all round. The government must however increase the list of exemptions from the 12 per cent withholding tax, such as those whose engagement breaks down, those who fall ill or lose their job, those who emigrate, anyone who in other words has to sell and has actually made no profit at all.

I am also surprised when the government makes changes to a taxation regime to take effect from the next day. Surely one should always give people a breathing space so anyone unlucky enough to have taken on a loan to speculate in the last month should not be clobbered, but it should just be a warning to those who want to speculate in the future. The new taxation system may nail you… so make your sums carefully before you try to speculate.

These exceptions aside, it is worrying, but not surprising, that those with the greatest conflict of interest in making alarmist declarations are already trying to worry the public unnecessarily about what the budget measures actually mean. Estate agents telling us it will make prices go up is amusing when you think that after all that’s when they are happiest. So what are they really complaining about?

Obviously, volume of sales could diminish if the speculator is taken out of the equation, or has his or her activities curtailed.

Let’s start with the easy-to-digest good news first of all. Those who have inherited property post-1992 will no longer have to pay 35 per cent on the total profit made on the sale of the property but 12 per cent. So if you inherited a property in 1993 and declared its value at Lm40,000 and it is now worth Lm150,000 you don’t have to pay just over a third of the difference (the old 35 per cent capital gains tax) between Lm40,000 and Lm150,000, say Lm38,000 tax, but 12 per cent which would mean around Lm13.000, a massive saving and a far more reasonable amount to pay between usually more than one inheritor.

What was happening, and many notaries will confirm as much, is that many were simply choosing not to sell, refusing quite rightly in my view to give the government as much in tax (!) as often any of the inheritors would get individually.

So the taxation of the inherited home is now to be taxed far more nominally and far less draconian. It should encourage more people to put their inherited home on the market.

The changes in the property taxation for the general buying and selling of property are far different. Before you had to pay 35 per cent on your gain. It is actually quite amazing that people were managing to buy and sell flats within one or two years, or even less and make such hefty profits. This profit depended on prices always going up, and let us say they have gone up alarmingly in the last four years. Banks are now giving young couples 40-year loans instead of the 25 to make the monthly payment affordable. But if you calculate what these kids will actually be paying for their box in Marsascala, Swieqi, Qawra or San Gwann, the figures add up to alarming amounts.

Did your average speculator really believe that prices could just continue to go up irrespective of people’s less dramatic increases in their take home pay? What were the banks planning to do next? 60-year loans so that the speculator could go on making profits within a few months?

Basically the new measures favour those who have owned property for a “longish” time and now want to liquidate their investment over the speculator who buys and sells every six months to a year.

This is not appalling. This is just. One estate agent claimed it only favours those who bought many years ago and have made a huge increase in profits. This is misleading. Not every property in Malta has increased in value at the same rate. If for example you bought a holiday flat 25 years ago for a mere Lm5,000 and it is now worth Lm45,000 that is a massive profit on one hand but you have made it over 25 years! Modern Maltese speculators are making these kinds of profits within a couple of years or less today, and this is partly what is fuelling crazy house- price increases.

But if you plan to invest in property and go for a long-term investment this new system should suit you better. And this is what government should be encouraging. Not the fast quick-buck return which was producing a bubble which could have burst dangerously anyway, but solid returns built up over longish periods of time. Prices had actually started levelling off this year. So let’s hope this budget is a first small step of many that are needed to stabilise this economy and its property market particularly.